The Rewarded Generation - Why Gen Z should really be Gen R

Despite the pandemic and global economic instability, the tech-savvy and financially aware Gen Z is set to be the wealthiest generation yet. And with companies and brands all vying for the attention of potentially generous Gen Z spenders, it is clear this tribe feel they deserve something in return for their custom - and especially their loyalty. 

Gen Z wants their hard-earned money to work hard, so hard in fact they want to be remembered and recognised for where and how they decide to deploy their cash. Revealed in a recent survey by ZBD, 86% of Gen Z believe that cashback and loyalty rewards are an important part of making a purchase. 

Around Black Friday, Cyber Monday and Christmas, key focal points in the shiny ‘golden quarter’ for retail, hundreds of thousands of brands targeted loyal customers with creative, hyper-targeted marketing and discounts via emails, advertising, newsletters and across social media platforms. Despite this, 2024’s golden quarter returned disappointing figures with year-on-year sales growth of just 0.4%, according to The British Retail Consortium. It’s an indication that deals alone can’t be relied on; instead a new way forward is needed to engage consumers.

Appealing to Gen Z

Despite its relative wealth, there’s no doubt that cost of living is front and centre of mind with Gen Z, who have lived through multiple lockdowns and periods of global economic and geopolitical instability. 

With such a discerning audience, competing businesses are having to step up how they attract new customers, retain the base they have already and not only recognise loyalty, but reward it. Technology plays a huge part in how this is achieved, with frictionless payment services seamlessly rewarding users. At ZBD, we recently partnered with FinFare to provide instant cashback payments for customers in the USA as they shop at the likes of Nike, BestBuy and Adidas. This technology provides instant payments thanks to the power of the Bitcoin Lightning Network as we serve Gen Z’s appetite for rewards.

Gen Z appreciate choice and, by offering rewards via omnichannel loyalty - whether it is in-store, online or via apps and social media - providing a variety for the consumer will be key to securing loyalty. Having flexibility on when and where to spend their rewards will play a part, as well as an increase in popularity of subscription-based models where customers benefit from being a loyal member, while creating an additional revenue stream for the brand or business. 

Rewarding Loyalty

To appeal to this generation, rewards need to have real value. Consumer loyalty and rewards programmes have come under scrutiny in recent years with many left wondering whether their Tesco Clubcard (or similar) is really ‘saving’ them money on goods, or if it’s all a big con. 

So, with scepticism high, in early 2024, the Competition and Markets Authority (CMA), launched a review which analysed around 50,000 grocery items on promotion. The findings revealed at the end of November 2024, that 92% offered genuine savings against the usual price, despite the perception from 55% of shoppers that ‘usual’ prices were raised to make loyalty deals more appealing.

Good news for shoppers - but even this won’t cut it with the bulk of Gen Z. To them, rewards need to be instantaneous and uber flexible. Saving up to a minimum points threshold to redeem points, which can then only be redeemed in a handful of ways or exchanged for a different sort of points such as airmiles is olde worlde stuff. For Gen Z, rewards should be instantly granted, instantly obtainable and offer real world cash value. 

Rewarding Gen R

Gen Z’s appetite for meaningful rewards is a hunger that shouldn’t be ignored. By feeding this demand, long-term relationships and brand loyalty can be built with a generation set to be the wealthiest generation yet.  For brands ready to meaningfully reward this generation, the opportunity to connect with Gen Z is immense, creating a loyal customer base that values rewards for mutual benefit.